China Armco Sees Jiangsu Province Power Restrictions to Meet Annual Central Government Energy Usage Targets Negatively Impacting Its Operations

SAN MATEO, CA—(Marketwire - 09/10/10)—China Armco Metals, Inc. (AMEX:CNAM - News), a distributor of imported metal ore and a metal recycler with a new state-of-the-art scrap metal recycling facility in China, today announced that the Jiangsu Provincial Government has scheduled rolling blackouts in September for the Lianyungang enterprise zone where its wholly owned subsidiary, Armet Renewable Resourced Co., Ltd., operates its metal recycling facility. The power restrictions are being initiated by the province to meet annual central government industrial energy usage targets.

The energy restrictions will significantly reduce the company’s recycling capabilities in the fourth quarter, which is expected to impact its revenue in 2010 by as much as $40 million. This has caused management to revise its financial guidance for the full year of 2010, which is now expected to exceed $140 million with net income exceeding $8 million.

Commenting on the announcement, Mr. Kexuan Yao, CEO and Chairman of China Armco Metals, Inc., stated, “While the government's decision to restrict power will negatively impact our performance over the course of this month, we believe our recycling operations will quickly recover following this interruption as we ramp up our production utilization rates. With current steel prices remaining favorable to our operations, we see a strong outlook for the quarters ahead after this short term interruption is behind us."

About China Armco Metals, Inc.

China Armco Metals, Inc. is engaged in the sale and distribution of metal ore and non-ferrous metals throughout the PRC, and has entered the recycling business with the recent launch of operations of a one million ton per year shredder and recycler of metals located on 32 acres of land acquired by China Armco. China Armco maintains customers throughout China, which includes the fastest growing steel producing mills and foundries in the PRC. Raw materials are supplied from global suppliers in India, Hong Kong, Nigeria, Brazil, Turkey, and the Philippines. China Armco's product lines include ferrous and non-ferrous ore; iron ore, chrome ore, nickel ore, magnesium, copper ore, manganese ore, and steel billet. The recycling facility is expected to be capable of recycling one million metric tons of scrap metal per year, which will position China Armco as one of the 10 largest recyclers of scrap metal in China. China Armco estimates the recycled metal market in China as 70 million metric tons. For more information about China Armco, please visit http://www.armcometals.com.

Contact:
China Armco Metals, Inc.
Richard Galterio
U.S. Representative
954-363-7333
ir@armcometals.com